Charities play a crucial role within society but are facing growing competition. Adopting a market orientation assists for-profit organisations to improve performance and can potentially also assist charities. This paper examines the under-researched topic of how market orientation can be appropriately introduced into a charity, and the resultant effect upon performance. A charity that introduced market orientation is examined using a discourse transformation framework. Thematic analysis of in-depth interviews of employees identifies how management changed the organisation through use of a three-phase process of new managerialism, professionalism and embedding. Few if any papers have previously examined how management of a charity can successfully implement a market orientation. The paper thus expands our knowledge regarding implementation of market orientation, utilises a discourse transformation framework for examination of market orientation, and provides charity managers with worthwhile information regarding how market orientation can improve performance – for the benefit of society.
Charities play a vital role in society but are facing increased competition, partly due to an increase in the number of causes being promoted, and the desire of many existing organisations to grow and offer an increasing range of assistance to clients (Murray and Carter, 2005). A limited pool of resources (Philanthropy Australia, n.d.) and economic conditions impact on the public’s ability to donate. There is also a government trend towards ‘neoliberalism’ (Aronson and Smith, 2010) in various countries including the United States of America, United Kingdom and Australia resulting in access to government funding becoming increasingly based on competitive tendering. As well as these competitive issues, society is placing increasing pressure on charities to simply improve performance (Polonsky and Grau, 2011).
To address this environment, charities need to become more businesslike in an effort to survive (Jones, 2010, Polonsky, 2003 and Polonsky and Grau, 2008) and look for new and improved methods of service delivery (Jaskyte, 2004). Adopting a market orientation assists for-profit organisations to improve performance and can potentially also assist charities. The key challenge for charity organisations is to change their practise without compromising their underlying ethos. Whilst adoption of effective business practises is essential, these practises may clash with the philosophy and culture of charity organisations and potentially alienate significant stakeholders. Researchers have examined numerous aspects of market orientation in recent decades, particularly within the for-profit context, but little if any attention has been paid to the manner in which market orientation can be successfully introduced into organisations. Beverland and Lindgreen (2007, p. 430) suggested that ‘only one study has examined the implementation of a market orientation’ and to date, little if any research examining the process of change has been conducted in the nonprofit sector. Beverland and Lindgreen (2007, pp. 431–432) also contended examining the process of change ‘would advance our knowledge substantially as it would identify practical implications for marketing managers’. As pointed out by Durst and Newell (2001, p. 443), ‘relatively little is known about the reinvention strategies of nonprofit organisations’. As a result, we currently possess little knowledge to assist managers of nonprofit organisations to confidently introduce market orientation successfully. Despite being a neglected research area in regards to market orientation, marketing is relevant to nonprofit organisations (Drucker, 1990 and Kotler and Andreasen, 1996) and given the key role that such organisations play in society (Pope et al., 2009), should be the focus of further research. This study thus aims to address these issues and increase our understanding regarding how a charity can successfully introduce a market orientation to improve performance and also responds to the call from Tadajewski and Hewer (2011, p. 451) ‘that there needs to be a concerted effort in understanding how practitioners engage in marketing activities’.
In this paper, examination is therefore made of the manner in which a market orientation has been implemented within a charity and the resultant effect upon performance. The key focus is on identifying the changes that occurred within the organisation and how these changes were successfully embedded by management. Thus, the three key research questions addressed are: Firstly, what are the processes for effectively introducing market orientation into a charity organisation? Second, what are the characteristics of the transformed organisation? Third, what is the resultant effect upon performance?
The research thus aims to contribute in various ways. This is amongst the first known research to actually examine the process of implementing market orientation in charities. The research thus has potential to ‘transform the intellectual and practical landscape’ (Tadajewski and Hewer, 2011, p. 452) in relation to the successful introduction of market orientation into charities and addresses the shortage of practitioner perspectives (Cornelissen and Lock, 2005, p. 166). It also provides further support for the improved performance that results from implementing a market orientation within the nonprofit setting
executive leadership (
Froelich et al., 2011
) is a key issue in non-
profit organisations and the changes that a new leader makes ‘can
have profound impacts on nonprofit organisations’ (
Balser and Car-
min, 2009, p. 185
). This is indeed true for Camira. The employment
of a new CEO from a business background was the catalyst for
Camira to transform from a traditional charity to a more business-
like and professional organisation based upon a market-oriented discourse. The change was needed to improve the struggling char-
ity, and has been successful in enabling Camira to significantly in-
crease performance and improve both service delivery and revenue
generation. The new approach upset some employees who re-
signed, but overall, most existing employees recognised and ac-
cepted the need to change – for survival. Employees are more
likely to commit to a leader if the leader’s vision is similar to the
values acceptable to the employees (
King, 1990
). By maintaining
an underlining faith-based ethos, the leader gained ‘buy-in’ from
the employees, despite introducing new work practises. The first
stage of the change involved introduction of ‘new managerialism’
to bring an appropriate management structure into the organisa-
tion, followed by ‘professionalism’ and improved employee
skill-sets which set the stage for embedding of the new mode of
operating. When the transformation commenced, Camira had
approximately 1400 paid staff and 2000 volunteers. Five years after
the transformation, the level of paid staff has remained constant
but volunteer levels have reduced by 50% to approximately 1000.
This is a reflection of the more professional perspective desired
within Camira, and despite this reduction in volunteers, revenue
has increased by 56%, an indication of the increased efficiency
and effectiveness of Camira’s transformed, more market-oriented
operations.
The paper addressed three research aims. First, the processes for
effectively introducing a market-oriented discourse in a charity
organisation. New managerialism was first introduced, followed
by professionalism to provide the platform for embedding a mar-
ket orientation. The second aim was to determine the characteris-
tics of the transformed organisation. The ‘new’ Camira was
characterised by a more professional and businesslike mode of
operation with emphasis on new, more efficient service delivery
processes, and products more in tune with the long-term needs
of service recipient clients. Third, it has been identified that the
resultant effect upon performance of introducing a market orienta-
tion was an increase in service efficiency and overall revenue de-
spite a dramatic increase in the number of volunteers.
The paper advances academic and practitioner knowledge
regarding how market orientation can successfully be introduced
into the charity arena. The implications for marketing practise
are that the case study reinforces the claims of various academics
(for example,
Barrett et al., 2005
) that marketing practises devel-
oped in the for-profit arena are transferable to the nonprofit arena.
The research does however highlight that this transfer does need to
be conducted by appropriately qualified and knowledgeable man-
agement. Existing employees need to be ‘sold’ on the new, more
businesslike and professional discourse, and receive appropriate
training to operate in the new discourse. Any new employees will
often come from the for-profit arena and typically have strong ser-
vice delivery and/or marketing skills and thus be different to the
traditional charity employee previously employed. However there
is still a need for a personal commitment by employees to an orga-
nisation’s work which is identified as a strong factor for entering
nonprofit employment (
Onyx and Maclean, 1996
).
This case study provides an example of a charity transforming
andbecomingmoremarket-orientedforsurvivalintheever-chang-
ing environment. The study offers managers of charities useful
knowledge regarding how market orientation can be successfully
introduced to meet the increasingly competitive environment. As
summarised by a senior, long-term Camira service manager – ‘‘
not
being called a charity, that’s not in our language anymore.